The S&P 500 reached an all-time high in Q4, extending its 2024 gains as election results fueled expectations for tax cuts and pro-growth policies in 2025. The index delivered a modestly positive Q4 return and over 20% annual growth for the second consecutive year1.
October began with market pressure from election uncertainty and concerns about U.S. fiscal health. Tightening polls and media focus on rising deficits and debt pushed Treasury yields higher, with the 10-year yield climbing from 3.75% to over 4.20%. These factors caused the S&P 500 to dip 0.91% for the month2.
The mood shifted after Donald Trump’s re-election and a Republican “Red Sweep” of Congress3. Optimism over tax cuts and deregulation drove the S&P 500 past 6,000 in the fourth quarter. While concerns arose over unorthodox cabinet appointments, market sentiment improved following key nominations, helping stocks rally into November.
December saw a mix of optimism about the incoming administration and volatility from trade tensions and reduced Fed rate cut projections for 20254. The S&P 500 hit new highs near 6,100 before ending the year slightly positive5.
Overall, 2024 was a strong year for markets, buoyed by a resilient economy, Fed rate cuts, and market resilience despite political uncertainty6.
| S&P 500 Total Returns by Month in 2024 | |||||||||||
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 1.68% | 5.34% | 3.22% | -4.08% | 4.96% | 3.59% | 1.22% | 2.43% | 2.14% | -0.91% | 5.87% | -2.38% |
Source: Morningstar 1-31-2024 – 12-31-2024
| US Equity Indexes | Q4
10/1 – 12/31/2024 Return |
1/1 – 12/31/2024
Return |
| S&P 500 | 2.41% | 25.02% |
| DJ Industrial Average | 0.93% | 14.99% |
| NASDAQ 100 | 4.93% | 25.88% |
| S&P MidCap 400 | 0.34% | 13.93% |
| Russell 2000 | 0.33% | 11.54% |
Source: YCharts 1-31-2024 – 12-31-2024
International markets underperformed the S&P 500 in Q4, delivering negative returns due to weak growth prospects and political uncertainty. Emerging markets faced pressure from South Korea’s political crisis and concerns over Chinese growth, while turmoil in France and Germany hurt developed markets. For the year, foreign markets lagged the S&P 500 but ended modestly positive, with emerging markets outperforming developed markets thanks to late-year Chinese stimulus boosting hopes for a rebound7.
| International Equity Indexes | Q4 Return
10/1 – 12/31/2024 |
1/1 – 12/31/2024
Return |
| MSCI EAFE TR USD (Foreign Developed) | -8.06% | 4.35% |
| MSCI EM TR USD (Emerging Markets) | -7.84% | 8.05% |
| MSCI ACWI Ex USA TR USD (Foreign Dev & EM) | -7.50% | 6.09% |
Source: YCharts 1-31-2024 – 12-31-2024
Commodities had mixed Q4 performance, with a strong U.S. dollar pressuring some assets. Gold posted a slight quarterly loss due to a December dollar surge, while oil gained on improved Chinese economic data and higher demand expectations. For 2024, commodities saw modest gains, with gold benefiting from geopolitical uncertainty and inflation, and oil rising on OPEC supply discipline and optimistic 2025 growth forecasts.
| Commodity Indexes | Q4 Return
10/1 – 12/31/2024 |
1/1 – 12/31/2024
Return |
| S&P GSCI (Broad-Based Commodities) | 3.81% | 9.25% |
| S&P GSCI Crude Oil | 5.24% | 0.13% |
| GLD Gold Price | -0.38% | 27.19% |
Source: YCharts/Koyfin.com 1-31-2024 – 12-31-2024
The Bloomberg Barclays US Aggregate Bond Index posted a moderately negative Q4 return, pressured by U.S. deficit concerns and reduced expectations for 2025 rate cuts, but ended 2024 slightly positive.
Shorter-duration bonds outperformed in Q4 and for the year, supported by Fed rate cuts and resilient growth and inflation metrics. Longer-duration bonds declined in Q4 and finished 2024 slightly negative due to fiscal concerns and a strong economic outlook.
In corporate bonds, high-yield debt outperformed investment-grade bonds in Q4 and for the year, as election results boosted confidence, prompting investors to seek higher yields despite greater risk. High-yield bonds logged solid annual gains, while investment-grade returns were modestly positive.
| US Bond Indexes | Q4 Return
10/1 – 12/31/2024 |
1/1 – 12/31/2024
Return |
| BBgBarc US Agg Bond | -3.06% | 1.25% |
| BBgBarc US T-Bill 1-3 Mon | 1.19% | 5.32% |
| ICE US T-Bond 7-10 Year | -4.59% | -0.52% |
| BBgBarc US MBS (Mortgage-backed) | -3.16% | 1.20% |
| BBgBarc Municipal | -1.22% | 1.05% |
| BBgBarc US Corporate Invest Grade | -3.04% | 2.13% |
| BBgBarc US Corporate High Yield | 0.17% | 8.19% |
Source: YCharts 1-31-2024 – 12-31-2024
Sources:
1. https://apnews.com/article/budget-deficit-trump-harris-kamala-debt-1ee3ff65e22ccf19d19b792ee22c46da
https://www.wsj.com/politics/elections/economists-say-inflation-deficits-will-be-higher-under-trump-than-harris- 0365588e?msockid=39e3102d05146e2907c2047604786f6c
3. https://www.barrons.com/articles/trump-stock-market-volatility-risks-2025-38750640
4. https://www.ft.com/content/012ce60b-c4da-42b3-8112-949babdfba36
https://www.newsweek.com/wall-street-sees-gains-following-trumps-pick-bessent-treasury-1991199
6. https://finance.yahoo.com/news/chinas-latest-stimulus-boosts-emerging-023037217.html
7. https://finance.yahoo.com/news/chinas-latest-stimulus-boosts-emerging-023037217.html
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